Choosing The Right Energy Provider For Your Business

Posted on April 22nd, 2011 by

When considering which energy provider will best fit your company’s needs, it is important to make an apples-to-apples comparison. There may be items or clauses in the contract that might not be in your company’s best interests. For example, some providers might offer a larger bandwidth, a tolerance of how much you have to stay within in order to not get penalized. If your business is industrial in nature, like a manufacturer, then this is something that you must look out for because your bandwidth will need to be wide. Consider the possibility and frequency of shutting down a plant that runs twenty-four hours a day, seven days a week. This action, because it will create a significant drop in the amount of energy you consume, could force you to pay large penalties. If your business is more commercial, like restaurants, a retirement community, or even an office building, then your bandwidth will not need to be as wide because most of your variance will be weather driven.

Providers might also haggle with you over the billing payment schedule. Some providers might offer a payment schedule of 16 days while others could offer longer. One of the biggest variables to consider is the financial stability of the energy provider. If your provider is owned by a generator or if they have generation assets or if there’s a large financial partner supporting the company, then your business should encounter less risk. The reason why this is so important is because if the provider gets caught in a position in where they have to come up with money to pay for power because of unstable energy prices, then you will want to know that your energy provider has the financial means to handle these potential irregularities. If for some reason your provider goes out of business, then your contract will either be given to your incumbent utility or another supplier will purchase your contract from your previous provider.

There are many other variables that you will need to consider. Hiring an energy consultant will help you manage these different options.

Written by Josh Stern, President of JASMAHN Energy Consulting.

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